Comparison of Ecommerce Online Stores

A storefront (shopping cart enabled web site)
This is a place on the web for people to go to see what you have to
sell. It can be your own website, a 3rd party site (like yahoo, or an
eBay store) or even just a temporary page on an auction site like
eBay’s.

A way to accept payment
Most
buyers want to use a credit card to buy online. To accept credit card
payments you need a merchant account. A merchant account is not a
business checking account. It is a special facility that allows you to
process card transactions.. In many cases you will have to pay higher
rates than offline businesses such as shops or restaurants who obtain a
signature from their customers. Another alternative that I explore in
the table below is Paypal. Think of it as quasi-cash that can only be
used online.

The combinations to
achieve these two are virtually infinite. Some providers have low
initial set up fees but high monly costs, or high transaction percent
costs, others are the reverse. Here is a look at several different ways
to meet these two requirements.

Click on the store logos to read more about their services.

Setup

0

0

Currently waived

Monthly

$15.95

$20

$29.95

Per Sale %

8% of initial $25 ($2), 5% of remaining

2.9%

0.5%

Per Sale

$0.02

$0.30

0

Merchant Account

*Effectively Paypal

Included

Included

Setup

0

Included

Included

Monthly

$20

Included

Included

Per Sale %

2.9%

Included

Included

Per Sale

$0.30

Included

Included

Storefront

Included

None

Included

Domain

Included

$20/yr

Included

Hosting

Included

$90/yr

Included

Web Design

$90

$150

$150

Comments

Proprietary eBay website

Paypal heavy on branding

eBay company

Total First Year Costs

$212.55

$256.60

$266.55

Recommended

.

Setup

$50.00

$49

0

Monthly

$39.95

0

$25

Per Sale %

1.5%

5.5%

Per Sale

0

$0.45

Merchant Account

Paymentech

Included

SellIt!

Setup

0

Included

$99

Monthly

$22.95

Included

$4

Per Sale %

2.69%

Included

Per Sale

$0.20

Included

Storefront

Included

None

Included

Domain

Included

$20/yr

Included

Hosting

Included

$90/yr

Included

Web Design

$150

$150

$150

Comments

Many Extras

Checks only once per month

Many Extras

Total First Year Costs

$349.5

$285.60

$447

Recommended

This
is just a start. As you can see the fixed and percent costs vary
considerably. To make a more informed decision on which route to take,
you need to have some idea of volume of sales and item prices. Then you
can do an analysis by $ sales. This starts showing up the high percent
cuts in vendors like 2checkout.com (who have the lowest startup fee).

We recommend Paypal for the fact that it has the lowest costs of a
“real” store front (as opposed to an eBay store) and BuildIt for its
sophisticated collection of web marketing and search engine
optimization tools.

Analysis Process

To come to these conclusions, we actually didn’t just grab what we thought might be the best paying affiliate links, but did a real detailed analysis.

The first step was to create a spreadsheet and pick some arbitary values for sales and volume.

This allwed me to zero in on the real costs of running an online store and plot some comparison graphs. Its much easier to see trends in this way.

You can grab the files I used in the ecommerce section of the file library.